I would fine with a similar deal for leronlimab.

I would fine with a similar deal for leronlimab.


https://seekingalpha.com/article/4289185-gile...-nv-winner


The Gilead deal with Galapagos closed on August 23, 2019. It is mainly for collaboration in research and development but included an equity investment of $1.1 billion. Combined with prior ownership, Gilead now owns about 22% of Galapagos stock.

Gilead paid a $3.95 billion upfront fee, and it also is paying milestones and royalties for each potential therapy it chooses to option. Gilead will acquire rights to participate in the development and commercialization of the Galapagos current and future clinical programs that exist now or enter clinical development during the first ten years of the collaboration. Gilead may exercise its option to acquire a license to a program after the receipt of a data package from a completed, qualifying Phase 2 study. If GLPG-1690 receives marketing approval in the United States, Gilead will pay Galapagos $325 million as well as tiered royalties. If Gilead exercises its option to acquire a license to the GLPG-1972, it will pay a $250 million option exercise fee, and Galapagos would be eligible to receive up to $750 million in development, regulatory, and commercial milestones plus tiered royalties.

For other products in Galapagos' current and future pipeline, Gilead would pay a $150 million option exercise fee per program. Galapagos would receive tiered royalties ranging from 20% to 24% on net sales of all Galapagos products optioned as part of the agreement. The companies would share development and commercialization costs equally. But Galapagos retains exclusive rights to commercialize products included in the optioned program in the European Union, Iceland, Norway, Liechtenstein, and Switzerland.

Note that in addition to the cash paid, Gilead can expect to pay quite a bit more cash in the future in option fees and potential milestones. There will be substantial development costs for clinical trials of the drugs. However, the initial chunk of cash is quite a bit less than it paid for Pharmasset or Kite. Since 22% of Galapagos now belongs to Gilead, some of the cash used might be considered to be like an internal transfer.